FT.com / UK / Business - Corporate exiles face years of tax scrutiny.
I've been saying for a while I thought HMRC woulod issue robust challenge to thsoe companies who said they had left the UK. Now it is confirmed:
UK companies seeking to minimise tax bills by locating abroad would face years of scrutiny to ensure senior management decisions have genuinely relocated, a senior official at HM Revenue & Customs has said.
Firing a warning shot across the bows of companies thinking of emigrating, Dave Hartnett, permanent secretary for tax at HMRC, told the Financial Times he was not convinced that relocations could be done in a “clean way” and warned that a challenge could come years after the move.
IFRS 8 is a good reason why - it shatters forever the myth of board meeting control inherent in these artificial looking relocations. I actually also think it shatters forever the idea that there is foreign control of a subsidiary. If the Chief Decision Maker allocates resources in a multinational corporation (and that is usually the CEO, but never, I suspect, the Board) then control is centralised as is tax residence - and try and prove otherwise when accounting rules confirm this to be the case.
If the CEO moves (as per HSBC) there's a claim to have left. If not - you're in deep, deep trouble. And rightly so. Good for HMRC, I say.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
This simply ensures that any relocations are done properly. The CEO who thinks he can hang onto his large house in Surrey and flit over to Dublin every month is fooling nobody but himself, but the worldwide corporation that is prepared to dump Mr Smith and Mr Brown in favour of Mr O’Leary and Mr Muller (who probably went to the same business school) may save a considerable amount of tax.